29 June 2013
according to sec 309 of companies act, remunaration paid to directors should not exceed 10% of net profit when there are more than one director. so the remunaration to directors can be paid in ratio of 8:2 between two directors or not ? thanks
Read more at: https://www.caclubindia.com/forum/remunaration-to-director-254157.asp
Section 198(1) relates to overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits. The total managerial remuneration payable by a public company or a private company which is a subsidiary of a public company, to its directors and its manager in respect of any financial year shall not exceed 11% of the net profits of the company for that financial year. Such net profits shall be computed in a manner laid down under sections 349 and 350, except that the remuneration of the directors shall not be deducted from the gross profits.
Remuneration is payable to all the directors including managing and whole-time directors and in any capacity. Therefore, it includes the remuneration for services rendered by him in any other capacity other than that of a director.
29 June 2013
Thanks for you reply Ajaysir, but i have consulted with ROC and it is of an opinion that remuneration to one director can not exceed beyond 5 % of net profit. so i am little confused in this matter. So, can you please refer me any case law order in this respect.
01 July 2013
my reason for worry is that i have seen few companies which are paying more than 5 % without CG approval. so i just want to ask you whether there was any case law in past where ROC had restricted any company paying more than 5%.
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